Are Tax Returns and Accounting Going Digital in the UK?
The UK government’s Making Tax Digital initiative will speed up preparing, reporting and filing taxes. Taxes going digital in the UK is an issue that’s of paramount concern to small business owners who often face problems with their tax returns and accounting.
At a time when taxes could be going digital sooner than later, it helps to partner with Smart Solutions for lasting solutions to your taxation and accounting needs. We’re here to assist you with all your accounting and taxation needs. Irrespective of the subject matter’s complexity of the subject matter, you can count on our experienced team of tax experts to offer you immense support.
What Does Making Tax Digital Mean to Your Small Business?
- UK business owners have no option than to roll along with the Making Tax Digital (MTD) initiative, as it impacts all entrepreneurs, including landlords.
- Businesses and individuals will need to start recording their tax returns digitally via accounting software or online applications.
- You and your accountant will have to transmit your electronic tax information to the HMRC quarterly.
- When taxes go entirely digital in the UK, that’ll drastically reduce the time it takes your business to prepare and file its taxes.
- Business owners will get a centralized view of their tax information, including liabilities and entitlements. This means you’ll know the amount you owe at any moment in time.
What’s the Making Tax Digital Initiative All About?
Announced way back in 2015, Making Tax Digital is a brainchild of the UK government and the HMRC. It’s part of the government’s efforts to make it easier for business owners and individuals to get their taxes right and improve their affairs.
The HMRC is determined to go down in history as one of the digitally advanced tax administrations the world has ever seen. Making Tax Digital is all about introducing fundamental changes to the UK’s tax system to revolutionize it.
VAT-registered companies with a taxable turnover of £85,000 are bound to observe Making Tax Digital rules. They’ll use software to turn in their VAT returns.
Self-employed entrepreneurs and landlords who make above £10,000 in property income will also need to observe the MTD rules regarding income tax starting from early April 2023.